SFO probes EADS defence contract with Saudi Arabia

The Serious Fraud Office (SFO) is investigating allegations that European
defence group EADS gave Saudi Arabian officials luxury cars, jewellery and
briefcases of cash in an apparent attempt to smooth the passage of a £2bn
communications contract.

EADS's £2bn communications contract was one of the largest awarded by the Saudi government in recent yearsPhoto: AFP

A former employee of the aerospace and defence company has claimed he was sacked after raising concerns about the possibility of bribes changing hands. Lieutenant Colonel Ian Foxley, a former employee of EADS subsidiary GPT, has told the SFO that Saudi officials were given the gifts by middlemen.

A source close to the SFO confirmed a preliminary investigation is under way and Lt Col Foxley is understood to have been interviewed by investigators. "For confidentiality reasons, the SFO will be unable to make any public statement, but if charges are brought or a suspect is arrested it will become public very quickly," he said. The SFO declined to comment.

The Ministry of Defence, which helped coordinate the contract, has assisted the SFO with its investigation. "We take such allegations very seriously and we are looking at them carefully. It would be inappropriate to comment further while this process takes place," an MoD spokesman said.

The investigation could trigger another diplomatic incident, having awakened memories of a previous investigation into claims that BAE Systems paid bribes to a Saudi prince to help secure a £40bn arms deal. The SFO dropped the BAE investigation in 2006 because of a "need to safeguard national and international security".

The SFO was investigating allegations that BAE, one of the world's largest arms makers, ran a £60m "slush fund" offering sweeteners to officials from Saudi Arabia in return for contracts.

EADS's £2bn communications contract, one of the largest awarded by the Saudi government in recent years, was to upgrade the satellite and intranet systems of the Saudi National Guard, the 125,000-strong force that protects the royal family.

The contract was award to GPT Special Project Management Limited, which is owned by Paradigm Services Limited, which in turn is owned by EADS.

A spokesman for EADS said it is carrying out its own investigation and is aware that the allegations have been raised with the SFO.